Capterra surveyed 350 business decision-makers in Australia about their software purchases in 2023 and the areas they might have experienced buyer's regret. What will decision-makers do to improve their software selection processes for 2024? Read our survey results to find out.
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Software buyers may invest in tools to help address business concerns, such as operational inefficiencies, facilitating remote work and flexibility, and aiding talent acquisition and retention. However, in some cases, business decision-makers may feel dissatisfied following the purchase and implementation of such solutions, perhaps due to the tools not meeting their expectations. This could lead to regret for investing in that particular software.
But what can companies do to mitigate software buyer's regret? Capterra surveyed 350 people involved in software purchase decision-making processes at organisations in Australia. We wanted to know their companies' priorities and challenges and the software solutions they invest in. Have they had any software purchasing regrets? How can they avoid buyer’s regret again in 2024? The full survey methodology is at the end of the article.
Business goals, challenges and predicted growth for companies in Australia in 2024
Capterra’s study found that predicted business outlook is generally positive for companies in Australia, as 22% of respondents said their organisation expects accelerated growth within the next 18 months. Nearly two-thirds (65%) said they expect steady and moderate growth in operations, whilst only 2% predict a decline in business in 2024 and beyond.
Whilst a company’s expected growth is most likely a factor for decision-makers determining software investment choices, business goals can also play a key role. But what external factors might shape an organisation’s goals? The following were most selected by respondents:
- Economic growth rate (33%)
- Competition in their industry (31%)
- Supply and general costs (31%)
- Availability of skilled workers (31%)
These objectives can cross over into various business functions, as, for example, economic growth rates can impact decisions about expansion and revenue targets. A lack of skilled workers can also directly impact an organisation's ability to execute its business strategies. Without skilled workers, tasks may take longer to complete, which could decrease productivity and output. A lack of qualified employees can also contribute to higher turnover rates.
In recent years, Australia has faced both demand and shortages of skilled workers in various sectors, such as healthcare, IT and engineering. Capterra’s data shows that talent acquisition is indeed at the forefront of company decision-makers' minds as 'training and upskilling employees' (30%) and 'finding qualified talent' (29%) were the most frequently cited answers when respondents were asked to select the challenges they face going into 2024.
Identifying key challenges is crucial in setting effective business goals and determining where companies should invest in software. If a company faces concerns with customer retention, for example, setting goals to improve customer satisfaction and loyalty becomes a priority.
Although ‘identifying the right technologies to adopt’ is not the top-selected challenge, it is one of the main ones cited by decision-makers in our survey. Making the right decisions when it comes to technology purchases is essential so that business concerns can be addressed. Identifying the right tools can also help businesses avoid investing in generic solutions that are not tailored to their company’s unique challenges.
Software investment looks set to increase for businesses in 2024
The types of software companies are investing in can tell us a lot about general business priorities in 2023 and also going into 2024. To find out what technologies companies in Australia have adopted, we asked software decision-makers about the tools their organisation uses. Notably, 'accounting and finance' (37%) and ‘IT security’ (36%) stood out as the types of software that were most commonly implemented prior to the last 12 months, according to respondents.
The most popular tools companies have been acquiring within the last 12 months, according to decision-makers, are:
- Learning management systems (60%)
- Marketing software (59%)
- Collaboration software (59%)
- Scheduling tools (59%)
Investing in digital technologies such as learning management systems can help companies weather challenges, such as the skills shortage crisis, for example, by using the software to aid in training and upskilling of existing employees. But how much do company decision-makers plan to spend on tools that can help with business concerns and objectives in 2024 compared to 2023? The most selected response was an increase of 10-20% more than this year (chosen by 43%), and 18% of survey takers said they are looking to spend over 20% more.
Looking ahead into 2024, respondents said the software tools that are top priorities for investment are 'IT security' (31%), 'CRM' (25%) and 'IT management' (24%). Again, these software categories reflect the business challenges that continually need to be addressed, as cybersecurity issues are most likely an ongoing concern for companies.
Most decision-makers (97%) said they were satisfied with the last software tool they purchased. 64% of these were satisfied with the 'ease of use' of the tools, and a further 64% were impressed with the 'speed of response times' by software vendors. While adopting tools can benefit companies, buyer’s regret can still occur during or after investment, especially if the onboarding process does not go smoothly.
Top three factors leading to software buyer's regret
Various factors can cause buyer’s regret, whether there was a mismatch between what was promised and what the software delivered or a negative experience with the vendor that strained the collaboration, for example. Nearly two-thirds of decision-makers (63%) said they have regretted a technology purchase in the last 18 months (33% said they regretted one purchase, while 30% of respondents said they regretted multiple technology purchases).
The top three factors that led to software purchase regret were:
- The investment was more expensive than led to believe (35%)
- The tools were not compatible with existing systems (34%)
- Difficulty with technical implementation (32%)
Over half of those with buyer’s regret (56%) said the purchases had left a significant financial mark on the company's annual or long-term performance. 4% of respondents even said the impact was monumental and risked immediate harm to the business.
Aside from just the obvious financial impact, there are other ways that a bad purchase decision can affect a business. The biggest impacts cited by respondents were that it cost too much money, employees hated using the tools or it made the company less productive. Software purchases may become more expensive than expected due to hidden costs and additional expenses with implementation, customisation, training and support.
Vendor behaviour can also impact the buyer’s experience. 43% of those who said they regretted a software purchase said the handoff between sales and implementation was problematic. Many said the vendor overpromised or undelivered or did not manage expectations (at 38% each), highlighting the need for better communication to foster trust and loyalty.
How business decision-makers plan to avoid software buyer’s regret
Companies can mitigate the risk of buyer’s regret by making more informed decisions before investing in software. But what did survey takers who have experienced regret say they would do when handling future purchases? The biggest change respondents said they would make to their next software selection process is to ensure there is alignment among the stakeholder group about the evaluation and selection criteria (33%).
When asked who handles the new software selection within their company, 36% of respondents said they have a formal team with people from various departments. This was followed by companies having a formal team of solely internal IT professionals (34%).
The most popular changes respondents said they would like to make when buying new technologies seem to involve the stakeholders. This highlights how important it is to have diverse teams from different departments, roles and perspectives who can communicate clearly about the goals, timelines, criteria and processes of software purchasing with one another.
As a result of software purchasing regret, respondents also said they replaced or will replace the technology with another one from a different vendor (36%). Survey takers also said they:
- Attempted/will attempt to renegotiate their contract with the vendor (33%)
- Replaced/will replace the technology with another from the same vendor (32%)
- Asked/will ask the vendor to help remedy the issues (30%)
Voicing any concerns with the vendor is a practical first step toward finding a resolution. The company should also keep records of all interactions and agreements with the vendor for future reference.
Capterra’s study shows 2024 is expected to be a positive year for companies in Australia, with just over one in five business decision-makers saying their organisation forecasts accelerated growth. Investment in software looks to continue as it can aid companies in solving some of their critical business challenges and concerns, such as cybersecurity measures or adapting to emerging technologies.
However, software adoption can sometimes go wrong, leading to regret in purchasing tools. The financial impact of an incorrect purchase decision affects companies the most, likely due to hidden costs and additional implementation expenses. Vendor behaviour is also key in shaping the buyer experience, with the sales handover and tool integration proving the most difficult during adoption.
To mitigate software buyer’s regret, there needs to be effective communication among all stakeholders involved to clarify the company’s goals and desired outcomes before purchasing the tools. Software buyers can learn from past buying experiences and ensure they investigate vendors before further investing in technology.
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Capterra’s 2024 Tech Trends Survey was designed to understand the timeline, organisational challenges, adoption and budget, vendor research behaviours, ROI expectations, satisfaction levels for software buyers, and how they relate to buyer’s remorse.
The survey was conducted online in July 2023 among 3,484 respondents from the U.S., U.K., Canada, Australia, France, India, Germany, Brazil, and Japan, with businesses across multiple industries and company sizes (5 or more employees). Respondents were screened to ensure their involvement in software purchasing decisions.
Note: when we refer generally to “software buyers” or “business decision-makers” throughout the article, we are referencing the respondent sample outlined above.